LOW Lowe's misses by $0.03, misses on revs; guides Q3 EPS below consensus; guides FY10 EPS below consensus
Reports Q2 (Jul) earnings of $0.51 per share, $0.03 worse than the First Call consensus of $0.54; revenues fell 4.6% year/year to $13.84 bln vs the $14.34 bln consensus. Co issues downside guidance for Q3, sees EPS of $0.21-0.25 vs. $0.27 consensus. The company expects to open approximately 11 new stores in Q3 reflecting square footage growth of approximately 5% -- Total Q3 sales are expected to decline 2-5% (vs the -0.9% consensus0 -- The company expects comparable store sales to decline 6-10%. Co issues downside guidance for FY10, sees EPS of $1.13-1.21 vs. $1.23 consensus. The company expects to open 62 to 66 stores in 2009 reflecting total square footage growth of approximately 4 percent -- Total FY10 sales are expected to decline approximately 3% (vs the -0.8% consensus) -- The company expects comparable store sales to decline 7-9%. "Cautious consumers remain reluctant to take on discretionary projects until signs of economic improvement are more evident. Despite weak sales, sound execution combined with disciplined inventory management and solid expense control led to reasonable earnings for the quarter, and Lowe's market share gains confirm our competitive position remains strong. There are some indications that a bottoming process in housing and the broader economy is under way, and we have seen customer traffic levels stabilize as we benefit from the resurgence of a do-it-yourself home improvement mindset. As near-term pressures on the consumer remain, we enter the back half of the year with a cautious sales outlook but have the flexibility to react to a quickly changing environment."
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